There’s now a 50% chance any American who has a credit card can’t pay their full bill. That’s according to research from The Century Foundation and Protect Borrowers (1), which found that 111 million Americans — or 40% of all U.S. adults — keep pushing off their total credit card payments. Researchers noted that 27 million Americans are now only able to pay their monthly minimums.
68 million of these credit card holders are now considered “debt-stressed” because they use more than 30% of their credit limit. Median utilization rates in this debt-stressed group rose from 63.8% to 70.7% between 2018 and 2025, showing how maxing out cards is more prevalent and pernicious for the most vulnerable.
The Century Foundation and Protect Borrowers found average credit card payments are rising far quicker than the national inflation rate. With the monthly total rising from $1,441 to $1,994, American cardholders are paying 38% more in 2025 than in 2018.
This sharp rise in monthly payments correlates with the extremely high average annual percentage rates (APRs) on credit cards, currently at a national average of 23%, according to LendingTree (2). The Century Foundation and Protect Borrowers say that this new normal for interest rates is about double the percentage in 2015.
Overall, credit card debt is at a record high amount of $1.28 trillion per the Federal Reserve Bank of New York’s data (3) from Q4 2025.
In the context of the affordability crisis — where the costs for goods and services remain persistently high — it makes sense why more people are clinging to credit as a lifeline.
The Century Foundation and Protect Borrowers cite research from the Urban Institute (4) showing that over 50% of American families can’t save money after paying bills and feel they can only “make ends meet.”
Survey data from the resume software platform Resume Now (5) also found about 4 in 10 Americans say their ability to pay for essentials worsened in 2025 compared with 2024.
One way President Trump proposed tackling this issue was to cap credit card interest rates (6) at 10%. However, this promise has yet to become a policy, and The Century Foundation and Protect Borrowers argue it’s costing American families millions every day.
Data shows (7) that every day President Trump doesn’t put a 10% cap into effect costs an additional $368 million in interest. From the day President Trump took office in 2025 until today, Americans have paid a total of $240 billion in credit card interest, which is $134.5 billion higher than if he had put the 10% cap in place at the start of his term.
But some question whether a 10% cap would be the optimal solution. For example, America’s Credit Unions argued (8) a flat 10% rate could increase fees and service charges to generate more revenue. They also estimated that two-thirds of current cardholders would have lower credit lines.
Beyond the 10% cap debate, The Century Foundation and Protect Borrowers said credit card holders are also struggling after U.S. District Judge Mark Pittman got rid of the $8 limit on late fees (9). Since these fees are now at $32, it could cost Americans an extra $10 billion each year.
However you look at it, the math simply isn’t working in favor of American cardholders. Until the cost of living stabilizes or incomes meaningfully rise, credit cards will likely continue to serve as a lifeline and a liability.
But that doesn’t mean there aren’t strategies anyone can use to start chipping away at credit card debt.
Read More: 5 essential money moves to make once you’ve saved $50,000
Getting a handle on credit card debt may feel insurmountable, but it mostly comes down to smarter budgeting. If you don’t already have an online budgeting tool, download one and link all of your cards and bank accounts. This will give you clear data on your monthly expenses and cash flows to start strategizing where to cut back or redirect spending to make a dent in debt payments.
After you’ve identified a few ways to put more of your budget toward paying down credit card debt, there are two methods most financial gurus recommend.
First, there’s the “avalanche method,” which focuses on paying off the card with the highest interest rate first and making minimum payments on others. The goal here is to reduce your total monthly interest.
Alternatively, the snowball method (10) suggests paying off the card with the smallest balance first. Although you aren’t saving as much, some financial pros like Dave Ramsey believe the “psychological boost” from closing accounts is more valuable because it helps you stay motivated.
Another strategy you might consider is consolidating high-interest balances onto a lower-interest card or loan. Many credit cards offer 0% or low-interest balance transfers for a limited period. Just be mindful of transfer fees and make a disciplined plan so you’re sure you’ll pay off this balance before the promotional rate ends.
While it may seem counterintuitive, you should also set aside a little money each month for a small emergency fund. Why? Think about it: Just one unexpected expense can make you tap into credit again and derail your progress.
While the standard advice is to build an emergency fund of three to six months of wages, just getting up to $1,000 stashed in a high-yield savings account can be a significant help for a health scare or car repair.
Lastly, try your best to stop adding to your balances by relying more on cash or debit for your daily expenses. Even small changes like paying more than the minimum each month are big wins that can steadily get you out of this increasingly common debt cycle.
Join 250,000+ readers and get Moneywise’s best stories and exclusive interviews first — clear insights curated and delivered weekly. Subscribe now.
We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.
The Century Foundation (1); LendingTree (2); Federal Reserve Bank of New York (3); Urban Institute (4); Resume Now (5); The Washington Post (6); Reuters (7), (9); America’s Credit Unions (8); Wells Fargo (10)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
